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Monday, July 21, 2014

Below is a fictionalized case study that presents dilemma faced by leaders in real organizations. Also given is recommended solution to the problems. This has been published in Business Manager Magazine August 2014 edition.

X-Look Company is a fast-growing textile company with an annual turnover of Rs 1,200 million and has a strong workforce of 950 employees. The HR policy of the organization provided clear guidelines to the HR department regarding how different HR functions are to be performed. As regards the recruitment of managerial people, the policy recommended direct recruitment for entry-level categories like junior managerial positions preferably through campus interviews while the suggested course for filling the senior managerial positions was through internal promotions.

Mr. Malhotra, a topper in the production engineering discipline, was chosen as a management trainee by the company in one of its campus interview programmes. As per the terms and conditions of his employment, Malhotra was to undergo on-the-job training for a probationary period of one year. His eventual appointment as an assistant manager in any one of the engineering departments would to be conducted at the end of the probationary period. He was posted to the Research and Development (R&D) department and was reporting to Mr. Ravi Shankar, the head of R&D. Malhotra was keen to excel in the job and worked with zeal and vigor. Obviously, his behavior and performance was widely appreciated by many in the firm including his own peers in the training programme. Mr Ravi Shankar was also impressed by Malhotra's smartness, commitment and contribution. Thus Ravi Shankar was willing to recommend Malhotra's name for any of the important assignments of the company befitting his knowledge and sincerity after he completed his training period.

Quite unexpectedly, the post of design manager in the firm suddenly fell vacant due to the untimely demise of its incumbent. Mr. Ravi Shankar strongly believed that Malhotra would excel in this post given his knowledge, skill and creativity despite his lack of experience and thus strongly favoured him for the post. In this regard, he sought an exemption from the existing HR policy which stipulated that the trainees ought to be considered only for assistant manager cadre after they complete their training programme successfully. Further, he also requested the management to instruct the HR department to conduct an immediate evaluation of the training performance of Malhotra to make him available for the vacant position on time.

The management obliged Ravi Shankar and instructed the HR department to conduct the post-training evaluation for Malhotra and send a report in this regard to it at the earliest. The HR department promptly conducted the evaluation and forwarded its report. As the report was very positive, management moved in quickly to appoint Malhotra as the design manager by treating his case as an exceptional one.

However, the decision of the management did not go down well with other employees including management trainees as they began to feel that Malhotra was unduly favoured. Even those people who earlier appreciated Malhotra's performance and behaviour soon changed their mood and turned against him. Consequently, they began to express their dissatisfaction in all possible forms and forums. Management could clearly discern the general mood of the employees and became anxious over the negative fallout of its decision. It has also witnessed a perceptible decline in the term spirit, interest and commitment of the employees, in general, and the management trainees in particular.

With the mounting criticism of its action, the management began to think that it has no choice other than back-tracking on its own decision. After dilly-dallying for some time, the management finally decided to shift Malhotra to a lower cadre and keep him there for some time before being elevated again to some higher position. However, the news of his imminent removal from his new position completely demoralized the young and energetic Malhotra and he began to wonder how his removal would be viewed and interpreted by other trainees. To avoid his unceremonious exit from the present post, Malhotra resigned his job voluntarily and quit the firm abruptly.

Malhotra, a brilliant engineering graduate, who joined the organization with high hopes and proved himself an excellent employee during the training, now finds his career in shambles. Sadly, the management of X-Look also lost an efficient and enterprising employee. Looking back at the whole episode, the company realized that it had not properly considered the human element involved in all its decisions concerning Malhotra and was merely guided by the mechanical elements.

Discussion Questions & Solutions1)According to you, what is the root cause of the problem in the Malhotra episode and who is to be blamed for his present troubles?

The HR Policy of X-Look, a fast-growing textile company provided clear guidelines on how the HR should function like direct recruitment for entry-level categories and senior managerial positions to be filled through internal promotions.

Mr. Malhotra, a topper in production engineering, joined as a management trainee through campus interviews. He would be absorbed as an Assistant Manager in any one of the engineering departments after completion of his one year probationary period as per the T&C of his employment.

Malhotra excelled in his traineeship period in the R&D Dept by his exemplary behavior and performance. Mr. Ravi Shankar, his manager was also impressed by Malhotra's contribution recommended Malhotra's name to Management for the post of Design Manager when it fell vacant. This was duly executed by the HR Dept. and Malhotra was appointed as the Design Manager surpassing the HR policies by treating it as an exception. Here the problems started for both Malhotra and X-Look Company.

The promotion of Malhotra could have been handled in a better way. He was deserving the promotion as highlighted in the case study. The HR Dept. should have consulted all stakeholders before executing the management’s decision and communicated it with appropriate reasons. This could have got the commitment of the people first and their behaviour change thereafter could have been avoided and, hopefully, their attitude too. This was found lacking. Hence the internal dissent started ultimately leading to back-tracking of the decision for Malhotra who eventually left the company.

It is also the Management’s responsibility for setting the policies of the company and ensuring that it’s practices do not have an adverse impact on day to day operations or violate ethical standards.

2) If you had been Malhotra, what would have been your response to these developments?

One can understand how demoralizing it would have been for Malhotra to find himself removed from his new position & how it would be perceived and interpreted by everyone in the company including his trainee batchmates whom he had surpassed by way of his work performance to promotion. Malhotra resigned from his job voluntarily, quit the firm and found his career to be in shambles for which he is to be also partly blamed by way of his actions. Agreed that the actions of Management of X-Look Company were dilly-dallying, but Malhotra before taking such a serious decision could have given it another thought.

Malhotra could have had one-to-one meetings with the Management and asked for his future career prospects in the organization – whether he as an outstanding performer will get another promotion opportunity. If the chances indeed were there, then Malhotra should have continued in another role assigned to him in the company for some time. Malhotra could have also spoken to Mr. Ravi Shankar, his manager for guidance.

Malhotra should realize that resigning from the job and quitting the company is not the solution. Even if he were to do so, he will have to start afresh in whichever other company, he finds a job next. Chances are that prosective recruiters may also question his removal from Managerial position in X-Look Company. They will not listen to negative reasons about X-Look Company from him like internal dissent, lack of co-operation from other co-workers, etc…Doubts may arise about the capability of Malhotra although that may not be the case.

This was not a win-win situation for both Malhotra & X-Look Company who in their process of not handling this situation properly lost out an efficient and enterprising employee and Malhotra found his promising career to be derailed.

3) What steps should the management take to avert the recurrence of such situation in the future?

Looking back at the Malhotra episode, X-Look Company realized that it had not properly considered the human element involved in all its decisions concerning him and was merely guided by the mechanical elements.

In order to better achieve its overall goals, the company should create internal partnerships like labor-management-cooperation to improve flexibility, responsiveness, and knowledge sharing amongst its employees. Successful partnerships create a basis for mutual trust and respect and serve as a means for adapting to change.

Break old bureaucratic rules and policies that prevent or inhibit high-performance work towards achieving company’s goals which was in the case of Malhotra. In doing so, the employee's will be freed from bureaucratic silliness and the Management of the company will find great energy and support from its employee's. The decision to promote Malhotra was right as he fit all the eligibility criteria but the policies and the rules of the company did not support it.

X-Look Company must provide appropriate services, benefits, and policies to enhance employee well-being, satisfaction and motivation. Place special emphasis on a variety of approaches used to satisfy employees with differing needs and expectations in order to reduce attrition and increase motivation. Examples include personal and career counseling, career development and employability services, helping employees develop learning objectives and plans. This could have been done in case of Malhotra and thus pacified him and retained him. But lack of positive assurance action from the company acted as a deterrent for Malhotra which eventually led him to take the decision.